News - Future of Energy: Solar to Lead As Global Electricity Demand Soars

BloombergNEF's New Energy Outlook 2026 outlines a major shift in the global energy landscape, projecting that solar energy will become the leading source of electricity by 2032. This shift is driven by falling solar costs and overcapacity, alongside a dramatic increase in battery storage capacity, expected to grow 17 times to 3.8 terawatts by 2035. David Hostert, Chief Economist at BloombergNEF, highlights the crucial role of currently viable technologies: "In today’s energy crisis, we have scalable and cost-effective solutions unlike in past decades. Clean power and electrification not only bolster energy security but also reduce emissions." With electric vehicles reducing crude oil demand, a significant decline in coal-fired power is mainly enabled by renewable energy sources and gas. This shift considerably lowers CO2 emissions in the Emission Transition Scenario (ETS). Political dedication to cutting emissions, as shown in the Net Zero Scenario (NZS), will further curb oil and gas demand. The move towards a larger and more adaptable power system is unavoidable, with an estimated 11% of megawatt-hours needing to be shifted by 2035, up from the current 3%. A landmark was reached in 2025, with $2.3 trillion invested in the global energy transition. Achieving the NZS by 2050 requires an additional 24% in investments, amounting to $235 trillion, with a significant 84% allocated to low-carbon technologies. Matthias Kimmel, Head of Energy Economics, says: "With the rapid rise in electricity demand due to EVs, data centers, and growing populations, the world must provide energy in the most efficient and cost-effective manner. NEO predicts solar will lead by 2032, underscoring the essential role of clean technologies in energy security and meeting global power needs." The report provides key insights: 1. Global electricity demand has more than doubled since 2000, largely driven by rising consumption in both expanding economies and developed regions. By 2050, demand in the ETS is expected to grow by 69%. Aligning capacity with growing demand puts pressure on grid expansion and permits. 2. This edition includes a revised NZS, reflecting changing policies and the slower pace of technological advancements since 2024. Under these conditions, peak global warming is projected to reach 1.81°C. 3. Achieving a 1.5°C warming target seems unattainable, with persistently high emissions and significant investments in carbon-heavy infrastructures. 4. Despite half a trillion dollars invested in green technology startups and government backing, breakthroughs in low-cost energy remain elusive. There is strong confidence in potential emerging technologies like new nuclear and geothermal energy. 5. Asia Pacific is leading in nuclear expansion, with major contributions from China’s and India’s developments, significantly adding to nuclear capacity. 6. China is portrayed as a major player in cutting emissions, predicted to reduce emissions by nearly 50% by 2050 from their peak, although still higher compared to Western counterparts. For comprehensive insights, BloombergNEF clients can access the full report on bnef.com or via the Bloomberg Terminal.